Following the Principality of Monaco’s placement on the FATF’s grey list in June 2024, and its subsequent classification as a “high-risk” money laundering country by the European Commission, the compliance function currently represents a focal point in Monaco’s institutional and operational debate. In such a pressurized environment, the role of the Compliance Officer has found itself under constant pressure, both in terms of the operation of systems and in terms of individual responsibility.
Long a control or support function, compliance has matured into a strategic and tactical operational weapon, providing governance for public and private players.
Today, compliance is no longer seen as an option, but as an imperative, helping to protect the reputation of those subject to it, guaranteeing the probity of management and sustainably strengthening the confidence of partners, investors and customers. In a context where transparency has become a decisive criterion, mastering compliance requirements is becoming a genuine vector of differentiation and attractiveness for financial centers.
At the top of the podium, the Compliance Officer occupies a strategic position in the supervision and implementation of operations to combat money laundering, the financing of terrorism and corruption (LCB/FT-P-C). He is responsible for ensuring that internal procedures are in line with risks, monitoring operations and business relationships, implementing “Know Your Customer” processes, raising employee awareness and training, and liaising with the supervisory authorities (Autorité Monégasque de Sécurité Financière, hereinafter “AMSF” for Monaco).
In the current Monegasque context, these missions take on a new dimension: they are naturally part of the objective of exiting the FATF grey list, and are part of the authorities’ desire to demonstrate the effectiveness of the AML/CFT-P-C framework.
However, such prerogatives demand significant legal responsibility, placing Compliance Officers at the forefront of prevention measures – both of risks and opportunities.
In this respect, Monegasque law has demanding characteristics in comparison with European legislation. Article 71-2 of Law no. 1.362 of August 3, 2009 on the fight against money laundering, the financing of terrorism, the proliferation of weapons of mass destruction and corruption (hereinafter the “Law”) provides for the possibility of criminal liability for certain individuals in the event of failure to report suspicions.
Specifically, the law stipulates that natural persons subject to the law who “knowingly” fail to report suspicions, as stipulated in article 36 of the law, are criminally liable. It should be noted that legal entities may also be held liable, under more severe conditions.
This personal criminal liability is perceived by many professionals as a feature of the Monegasque system, which has led to a certain tension in the financial marketplace due to the fear of criminal prosecution, even in situations where failings are not the result of deliberate intent, but potentially of simple errors of assessment or shortcomings.
In practice, Compliance Officers working in Monaco are obliged to be vigilant both in terms of the performance of compliance systems and in terms of the analysis, documentation and justification of internal decisions.
At European level, on the other hand, the liability of Compliance Officers falls within a generally more protective framework. While there is no total harmonization between EU member states, it is accepted that the liability of Compliance Officers is in principle administrative or disciplinary, with personal criminal liability only exceptionally incurred in cases of intentional and grossly negligent involvement.
In France, for example, a Compliance Officer can only be held criminally liable if he or she has committed an identifiable offence. Mere failure to comply, or unintentional negligence, is not sufficient to incur criminal liability.
More generally, European law maintains the balance between the effectiveness of compliance systems and the protection of the individual, preventing the Compliance Officer from becoming the main bearer of criminal liability.
This means that, in practice, while the increased compliance and legal obligations required of Compliance Officers are necessary to defend the financial center and ensure its credibility, they should not hold back the real economy.
In other words, Monegasque companies need to be able to develop their activities and sales, welcome new players and innovate, while meeting their compliance obligations.
Likewise, the Compliance Officer profession must remain attractive. The challenge is to reconcile rigor and responsibility, risk prevention and economic development. The task here is to strike a balance between legal protection and operational flexibility.
This balance is crucial to ensuring the confidence of our partners and the sustainable growth of Monaco’s financial center.
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A comparison between Monegasque and European law highlights the following reality: the Principality requires Compliance Officers to be more exposed to criminal risk, reflecting its desire to strengthen the credibility of its financial center in the eyes of international authorities.
While this requirement certainly creates tension, it also offers a strategic opportunity for regulated entities that successfully integrate compliance at the core of their governance.
For Compliance Officers, this uniqueness calls for a proactive approach. It’s no longer just a matter of complying with legal obligations, but of demonstrating the effectiveness of the internal systems put in place, anticipating risks and guaranteeing the traceability of decisions. The function is thus transformed into a genuine pillar of corporate strategy, capable of safeguarding brand image and reputation, business continuity, while protecting the structure itself.
For Monegasque market players, the key lies in a strong, formalized compliance structure, combined with ongoing training and legal monitoring.
Compliance thus becomes a lever for performance and differentiation, capable of strengthening the trust of partners, investors, and clients, and supporting the Monegasque financial center in its sustainable exit from the FATF grey list.
